The final blocks of IPv4 addresses have been given to regional agencies, ushering in the IPv6 era

The Internet Assigned Numbers Authority (IANA) has handed out its last IPv4 addresses, leaving the remaining blocks to regional registries that in some cases may exhaust them within a few months.

The end of IPv4 (Internet Protocol version 4) addresses was announced in a ceremony in Miami on Thursday morning. Each of the five Regional Internet Registries (RIRs) was allocated one of the final five large blocks of about 16 million addresses.

The end of the central supply of IPv4 addresses signaled the urgency of enterprises and service providers to migrate to IPv6, the latest version of the protocol, which has been available for more than a decade and allows for an almost unlimited number of addresses. When there are no more IPv4 addresses available from the RIRs, new hosts on the Internet will not be able to communicate with systems that use only IPv4 without special mechanisms that could degrade the Internet experience. Some experts advise adopting a "dual-stack" approach to remain connected with both IPv4 and IPv6 hosts.

"A pool of more than four billion Internet addresses has just been emptied this morning," said Rod Beckstrom, president and CEO of the Internet Corporation for Assigned Names and Numbers (ICANN), which oversees IANA. "The future of the Internet, and the innovation it fosters, lies with IPv6."

IANA and the RIRs had laid the groundwork for Thursday's action in advance by agreeing on a policy that when the supply of large blocks went down to five, one would be assigned to each of the regional bodies. The policy was designed to ensure that regions where addresses were being used up less quickly wouldn't be left out in the end.

Though there is wide agreement that enterprises and ISPs need to migrate to IPv6, there are potential hazards both in delaying that move and in carrying it out. A key concern is that most available security tools don't work with IPv6. And though some experts point to network-based translation between the protocols as a short-term solution, others say that approach could break some applications and services.

The supply of fresh IPv4 addresses for North America will probably last only three to nine months, according to John Curran, president and CEO of the American Registry for Internet Numbers (ARIN), the region's RIR.

The action taken Thursday will have ripple effects on organizations that need IPv4 addresses in many countries.

As the final allocation took place, new rules immediately went into effect at the American Registry for Internet Numbers, the RIR for North America. In the past, ARIN has allowed its customers to forecast their need for addresses over the next 12 months and apply for a year's allocation. Now they will have to apply every 90 days, showing a forecast for that period.

"We don't want to have a circumstance where organizations come in and we give one a year's worth, and someone else has none," Curran said.

When APNIC's supply is reduced to its final block of 16 million addresses, it will restrict its customers to just one much smaller block of addresses. It expects this supply to last approximately five years.

Thursday's action will have no noticeable short-term effects, Internet Architecture Board Chairman Olaf Kolkman said during a press conference following the Miami ceremony. But over time, the Internet will be severely limited if network administrators don't migrate to IPv6, he said.

"Such an Internet is likely to grow increasingly less capable of serving our needs than it is today," Kolkman said. Because of the need for adaptation tools within the network, the end-to-end model that makes many Internet applications work will break down. For example, it might become hard to make a Skype call or to trade files, he said.

For businesses, migrating to IPv6 will cost money, but not making the move eventually could cost revenue, he said. "The next 2 or 3 billion customers will use IPv6 only, and they will not be able to do business with you," Kolkman said.

As the pool of IPv4 addresses shrinks, it's possible that a black market will form, but it probably won't be large, said Raul Echeberria, chairman of the Number Resource Organization. All the RIRs have set procedures for transfers between address holders, which are designed to make sure that addresses only go to entities that need them. Echeberria believes most addresses will change hands through those mechanisms.

Despite the small portion of Internet traffic that uses IPv6 today -- recently estimated at less than one-tenth of 1 percent -- Echeberria is optimistic about the work done so far by vendors and network operators.

"All conditions are in place for a successful IPv6 transition," he said.

"A crisis has been averted," ICANN's Beckstrom said. The collaborative culture of the Internet allowed ICANN, the RIRs, the Internet Engineering Task Force and other entities to deal with the declining address space and create IPv6, he said. "This model is working incredibly well for the world."